Problem Trading: Why We Should Learn to Live With Our Problems

It’s interesting that the most practical problem-solving lessons are business lessons. It’s because the stakes are real in business and you have real skin in the game. If you don’t make the right decisions, death is certain.

In fact, the default outcome for any startup is death. This means you have to move quickly and decisively to avoid that fate at all costs. Words such as “prioritisation” and “focus” takes on a whole new meaning here. Naturally when you are busy assembling an airplane after jumping off a cliff, it doesn’t leave a lot of time for dotting every i or crossing every t.

When the stakes are this high, there are far more problems clamouring for attention than you have the resources to address. You might feel like a firefighter, except it’s not just a building but the entire neighbourhood that’s ablaze. You might want to divide and conquer and save as many building as possible or, you might want to focus all your effort in eliminating the biggest fires and let the rest burn.

We usually choose the first and here’s why you shouldn’t.

Steve Jobs once said, “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things.”

While it’s easy to say no to new ideas, it’s 10x harder to say no to existing problems. In this context, focus is in deciding which fires should burn so that you can fight the fires which, if allowed to rage unchecked, will bring the whole thing down.

In February 2000, transaction volume at PayPal was increasing 3 to 5 percent every day. Business was growing but with each passing day the team was falling behind in addressing customer emails. This problem kept on compounding as the users who didn’t get a response kept writing over and over.

Out of a forty-person team, they had two support people. In other words, they didn’t care about customer support. Conventional wisdom would have called for them to devote as many people as possible to customer support. But that’s the opposite of what they did.

PayPal ignored their customers. When customers started calling (after not getting any replies on email) they stopped picking up the phones. That sounds highly counterintuitive, but not when you see all the other fires that were burning.

For example, they were raising their first major round of venture capital, starting to compete with Billpoint (eBay’s new PayPal killer), and negotiating a merger with Elon Musk’s Compared to these, customer support was the least important fire to fight. Solving that problem wouldn’t have moved the needle on the expected outcome. It would have been a wasted effort. So they let it burn.

Reid Hoffman gives a great example to illustrate this point. “Picture an emergency room surgeon trying to save the life of a trauma patient; as she’s conducting emergency surgery, she might notice a suspicious-looking mass, but she’s going to focus on patching the patient’s arteries first—there will be time for biopsies and tests later. After all, if the patient dies on the operating table, even a potential tumour will be irrelevant.”

Customer service was important but it wasn’t urgent. We often confuse between the two. We also have this inherently wrong notion that if we keep on solving problems, at some point there won’t be any problems left to solve. We (subconsciously) imagine a utopian future that is devoid of problems. One where we can simply relax.

That’s not true.

Problem Solving is a misnomer. We cannot eliminate all problems. Solving one problem creates another set of problems. Problem Solving is in reality Problem Trading. In other words, there will always be problems and they won’t get any easier with time. The good thing is that we don’t have to solve all of them. We just have to pick what problems we are willing to live with so that we can focus on the rest.

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